France's TotalEnergies halts new investment in Adani firms

France’s TotalEnergies, one of the biggest investors in Adani companies, said on Monday that it will make no new financial contribution till Gautam Adani and others are cleared of charges of bribing Indian officials and misleading investors in the United States.

The energy giant said it was not informed about the investigation by the US Department of Justice and the Securities and Exchange Commission into Gautam Adani, nephew Sagar Adani and six other executives.

“In accordance with its code of conduct, TotalEnergies rejects corruption in any form… Until such time when the accusations against the Adani group individuals and their consequences have been clarified, TotalEnergies will not make any new financial contribution as part of its investments in the Adani group of companies,” it said in a statement, adding that it will take ‘all relevant actions’ to protect its interests as minority stakeholder in Adani entities.

TotalEnergies holds a 19.75 per cent stake in Adani Green Energy Ltd. It has a 50 per cent stake in three joint venture companies producing solar and wind power with AGEL. The French firm also holds a 37.4 per cent stake in Adani Total Gas Ltd.

The company said that its investments in Adani’s entities were undertaken in full compliance with applicable laws, and with TotalEnergies’ own internal governance processes pursuant to due diligence and representations made by the sellers.

Shares of Adani Green closed down more than 8 per cent on Monday because of this development, even as the broader market saw gains after the Mahayuti’s victory in the Maharashtra elections and buying by Foreign Institutional Investors (FIIs). The BSE Sensex closed the day with gains of 1.25 per cent.

However, another major investor, GQG Partners, which had made huge bets on Adani group after the meltdown in shares of group companies following the allegations by US short seller Hindenburg, said the indictment is against individuals only and the bet it made on the group holds good.

GQG, whose exposure to Adani group companies stands at $8.1 billion, said in a statement, "On a fundamental business case, we continue to believe each individual company is well-positioned for the future. Our investments in Adani as of November 21 have had positive returns in aggregate for our portfolios.”

GQG said it will remain diligent in re-underwriting its positions and examining any new facts.

The Adani group found itself in fresh trouble last week after a court in New York indicted Gautam Adani and others on charges brought by US prosecutors, alleging that the billionaire was part of an elaborate scheme to pay bribes worth $265 million (Rs 2,200 crore) to Indian officials in various states to bag favourable terms for solar power contracts. The group denied these charges.